Euro zone government bond yields drop after Fed, eyes on BoE

Credit: REUTERS/DADO RUVIC

March 21 (Reuters) - Euro zone government bond yields edged down on Wednesday after Federal Reserve officials indicated they still expected to cut rates by 75 basis points this year.

** Markets await the outcome of the Bank of England policy meeting at 1200 GMT.

** Germany's 10-year government bond yield DE10YT=RR, the euro zone's benchmark, was down 1.5 basis point (bp) at 2.42%.

** Money markets priced in an around 85% chance of an ECB rate cut of 25 bps by June EURESTECBM2X3=ICAP from around 80% late on Wednesday and 90 bps in 2024 EURESTECBM6X7=ICAP from 85 the day before.

** The gap between Italian and German 10-year bond yields widened to around 124 bps after falling to its lowest in over two years last week at 115.40 bps.

** German 2-year bond yields DE2YT=RR, which are more sensitive to interest rate expectations, fell 4.5 bps at 2.88%.

(Reporting by Stefano Rebaudo; Editing by Shri Navaratnam)

((stefano.rebaudo@tr.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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